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13 Cards in this Set
- Front
- Back
The statement of changes in partners' equity shows the beginning balance in retained earnings, plus investments, less withdrawals, the income or loss and the ending balance in retained earnings
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FALSE
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The equity section of the balance sheet of a partnership can report the separate capital account balances of each partner.
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TRUE
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If partners devote their time and services to their partnership, their salaries are expenses on the income statement.
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FALSE
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If the partners agree on a formula to share income and say nothing about losses, then the losses are shared equally
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FALSE
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Assume that the S & B partnership agreement gave Steely 60% and Breck 40% of partnership income and losses. The partnership lost $27,000 in the current period. This implies that Steely's share of the loss equals $16,200, and Breck's share equals $10,800.
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TRUE
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In the absence of a partnership agreement, the law says that income of a partnership will be shared equally by the partners.
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TRUE
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When a partner leaves a partnership, the present partnership ends, but the business can still continue to operate.
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TRUE
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Assets invested by a partner into a partnership remain the property of the individual partner.
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FALSE
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Admitting a partner by accepting assets is a personal transaction between one or more current partners and the new partner.
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FALSE
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When the current value of a partnership is greater than the recorded amounts of equity, the current partners usually require any new partner to pay a bonus for the privilege of joining.
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TRUE
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When a partner leaves a partnership, the present partnership ends.
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TRUE
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To buy into an existing partnership, the new partner must contribute cash to the partnership
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FALSE
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When a partner leaves a partnership, the withdrawing partner is entitled to a bonus if the recorded equity is overstated.
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FALSE
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